Legal & Regulatory
By Dezan Shira & Associates
The Ministry of Commerce and Industry (MOCI) launched a mobile app called SEZ India under the government’s e-governance initiative. The app provides detailed information about the country’s special economic zones (SEZ), including information on regulations and trade policies.
In addition, the app acts as an integrated tool to facilitate speedy processing of various transactions for the SEZ developers and units.
TRAI to audit telecom networks
The Telecom Regulatory Authority of India (TRAI) will conduct a new type of audit on telecommunication networks across India during the first week of February. Although TRAI regularly audits telecommunication networks independently, TRAI recently asked telecom operators to assist with the February audit, which will test operators in five cities – Jaipur, Bhopal, Bangalore, Hyderabad, and Kolkata – for call success, blocked call, and call dropped rates as well as signal strength.
By Pritesh Samuel & Koushan Das
In a move that will boost foreign investment and business in the Indian economy, the Modi government recently unveiled various incentives for private companies that want to set up in international financial service centers (IFSC) in the country. These include granting such firms exemptions from several norms in the Companies Act, 2013. IFSCs serve customers outside the domestic economy and handle cross-border financial products and services. They can be set up in special economic zones (SEZs) to avail benefits and inducements that are applied to such zones.
Government Asks States to Exempt Startups from Local State Laws
In keeping with the government’s goal of a flourishing startup sector in India, the government is in discussion with state governments to allow startup firms to get exempt from local laws, including labor regulations. Many such firms get entangled into regulatory and tax disputes as their evolution propels them into legal grey areas, with the need for the updation of regulatory norms and laws. This is why the central government is considering a more flexible approach, whereby startups can benefit from regulatory easing.
Editor’s Note: The article was first published in July 2012 and has been updated on January 11, 2017 as per the latest developments.
By Dezan Shira & Associates
India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to The Company Act, 2013 in April 2014. Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger.
Central Bank Increases ATM Cash Withdrawal Limit
India’s central bank the Reserve Bank of India (RBI) on December 30 raised the daily ATM withdrawal limit to US$65 (Rs 4,500) from January 1, from the earlier limit of US$36 (Rs 2,500) per day. The weekly limit of US$351 (Rs 24,000) remains the same; for traders the limit is US$732 (Rs 50,000) per week. The development comes after the RBI stated that there should be enough currency notes in circulation following the surprise demonetization of the US$7 (Rs 500) and US$14 (Rs 1000) rupee notes on November 8. While the increase in withdrawal limit is welcome, most ATMs still do not have enough cash, particularly in big cities like Delhi, Mumbai, Kolkata, Chennai and Bangalore. A report by a leading newspaper stated that only 40 percent of the 220,000 ATMs in the country. Other reports say that the situation will fully normalize by March. Analysts have questioned the regulation saying that the increase in cash withdrawal might make the situation worse as the new currency is still not enough to meet demand.
By Dezan Shira & Associates
Editor’s Note: The article was first published in August 2013 has been updated as of December 29, 2016 to incorporate the latest changes.
In India, the permanent account number (PAN) is a ten character alphanumeric code combination allotted by the Indian Income Tax Authorities to individuals and registered entities. The PAN’s key function is as an all-in-one form of identification, but it also acts as a factor for all financial transactions; thereby maintaining a track-record of an individual’s financial transactions. Through this, PANs help in avoiding tax evasion and also support compliance of applicable laws.
All foreign directors or responsible persons engaged by the Indian subsidiary of a foreign-invested business must register for a PAN if they wish to operate their company accounts, regardless of whether they are based in India or not.
Ongoing RCEP Negotiations – India Offers China Tariff Concessions on Over 70% Goods
Under the ongoing negotiations for a Regional Comprehensive Economic Partnership (RCEP) agreement, India is proposing to offer tariff elimination on over 70 percent of goods from China. In addition, India has offered the highest level of tariff elimination to the member countries of the Association of Southeast Asian Nations (ASEAN) during a bilateral meeting in Indonesia.
To protect its domestic industries, such as steel, the Indian government will extend the tariff elimination period by up to 30 years. Other member countries to the RCEP want shorter adjustment periods. However, India is committed to a longer phasing out period, having forgone its proposed three-tier tariff concession system at the Laos Ministerial session in August. India’s next big concern is with regards to negotiations on the services agreement.